Improper Incentive Structure

Measures aiming at unlocking energy efficiency could unintentionally result in suboptimal results. Fiscal or tariff structures designed to encourage energy efficiency spending could transform into bad incentive structures. Such incentive structures usually focus on enabling very specific niche products/services, which in turn result in piecemeal rather than holistic energy efficiency improvements. An example of bad incentive structure would be tax credits for window renovations as opposed to investments in integrated energy efficiency solutions (isolation, ventilation systems, energy management, heating and cooling).